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ONLINE HOTEL SALES & OTA LANDSCAPE – CURRENT ANALYSES
How do online sales in the DACH area look at the moment and how will it develop? Many organisations, associations, hotels, technology offerers, agencies and advisors are asking these questions. One man has the answers: Prof. Roland Schegg of the technical college of Wallis, West Switzerland.
Sales channels of Swiss hotels
In 2002 direct sales in Swiss hotels was still over 70%. Currently this is decreasing and according to Prof. Schegg it is 60.7% which is made up as follows:
Nearly one overnight stay in four is already booked indirectly online, where it is mainly OTAs that are growing strongly:
The National Tourism Organisation (NTO) and Destination Marketing Organisations (DMO) do not deliver many bookings, together only 2.1%. In defence of the NTO and the DMOs one thing must be clearly stated: they generate additional traffic for the individual hotel websites, which in turn can lead to enquiries and bookings. That than depends on the hotel being able to appeal to the potential guest on the website.
Classical sales partners like travel agents come together with conference organisers and hotel chains to 10.3%. The remaining 2.5% are generated through other channels.
Sales channels of German hotels
In Germany, direct sales at 65.5% account for a greater proportion of bookings than in Switzerland. Direct sales are decreasing in Germany too though; in 2013 it was still at 67.3%.
The OTAs are a little stronger in Germany. One overnight stay in four is already booked indirectly online:
In the last two years, OTAs have had an unbelievable growth of 4.1%. This though is not the limit. According to prognoses, the proportion of OTAs will continue to rise in the future.
The National Tourism Organisation and Destination Marketing Organisations deliver even fewer bookings than in Switzerland. Together it is only 1.8 %. Here too though, of course they bring additional traffic to the hotels’ websites.
The proportion of classical sales partners is clearly lower than in Switzerland. Travel agents together with conference organisers and hotel chains in Germany account for only 5.7%. The remaining 1.1% is generated through other channels.
Sales channels of Austrian Hotels
Generally there are many similarities between the sales channels of Austrian hotels and those in Switzerland. Direct sales then are falling in Austria too and in 2015 they were around 63.6%, broken down as follows:
In 2002 direct sales in Swiss hotels was still over 70%. Currently this is decreasing and according to Prof. Schegg it is 60.7% which is made up as follows:
- Telephone: 19.9%
- Mail/Fax: 2%
- Walk-in (people arriving at the hotel without a reservation) 4.7%
- Enquiries from the hotel’s own website: 5%
- Enquiries by e-mail: 21.6%
- Direct booking over the hotel website: 7.5%
Nearly one overnight stay in four is already booked indirectly online, where it is mainly OTAs that are growing strongly:
- OTA: 20.6%
- GDS: 3.4%
The National Tourism Organisation (NTO) and Destination Marketing Organisations (DMO) do not deliver many bookings, together only 2.1%. In defence of the NTO and the DMOs one thing must be clearly stated: they generate additional traffic for the individual hotel websites, which in turn can lead to enquiries and bookings. That than depends on the hotel being able to appeal to the potential guest on the website.
Classical sales partners like travel agents come together with conference organisers and hotel chains to 10.3%. The remaining 2.5% are generated through other channels.
Sales channels of German hotels
In Germany, direct sales at 65.5% account for a greater proportion of bookings than in Switzerland. Direct sales are decreasing in Germany too though; in 2013 it was still at 67.3%.
- Telephone: 26.3%
- Mail/Fax: 3.1%
- Walk-in (people arriving at the hotel without a reservation) 5.5%
- Enquiries from the hotel’s own website: 7.8%
- Enquiries by e-mail: 16.6%
- Direct booking via the hotel website: 6.3%
The OTAs are a little stronger in Germany. One overnight stay in four is already booked indirectly online:
- OTA: 24.5%
- GDS: 1.1%
In the last two years, OTAs have had an unbelievable growth of 4.1%. This though is not the limit. According to prognoses, the proportion of OTAs will continue to rise in the future.
The National Tourism Organisation and Destination Marketing Organisations deliver even fewer bookings than in Switzerland. Together it is only 1.8 %. Here too though, of course they bring additional traffic to the hotels’ websites.
The proportion of classical sales partners is clearly lower than in Switzerland. Travel agents together with conference organisers and hotel chains in Germany account for only 5.7%. The remaining 1.1% is generated through other channels.
Sales channels of Austrian Hotels
Generally there are many similarities between the sales channels of Austrian hotels and those in Switzerland. Direct sales then are falling in Austria too and in 2015 they were around 63.6%, broken down as follows:
- Telephone: 14.1%
- Mail/Fax: 1.7%
- Walk-in (people arriving at the hotel without a reservation) 3.7%
- Enquiries from the hotel’s own website: 10.7%
- Enquiries by e-mail: 24.7%
- Direct booking via the hotel website: 8.8%
Indirect bookings are increasing at an ever-faster rate in Austria and again the OTAs are particularly noticeable:
Amongst National Tourism Organisations and Destination Marketing Organisations in the DACH region, the Austrian organisations bring in the most bookings. The figure here though is still relatively low, at 2.2%.
Classical sales partners are significantly more important for bookings in Austria than those in Germany and about as significant as those in Switzerland. Travel agencies, conference organisers und hotel chains generate 10.2% of bookings. The remaining 1.6% comes through other channels.
The OTA Landscape in the DACH region
The current figures from Prof. Schegg from 2015 show the dominance of three big players amongst OTAs: Priceline, Expedia and HRS. Booking.com and agoda amongst others belong to Priceline, while e.g., ebookers, venere.com and Hotels.com belong to Expedia. HRS is in the OTA market with HRS, tiscover and hotel.de.
In all three countries of the DACH region they achieve together between 89.5 – 94.2% of the OTA market. In all countries Priceline is the biggest player in the market by a distance:
Conclusion: Direct bookings are falling; indirect sales and thus commissions are growing.
Hotel vs. OTA?
At the end of the presentation by Prof. Schegg, Markus Gratzer, the General Secretary of the Austrian Hoteliers Association joined him on stage. Gratzer stressed that the OTAs are important partners in the hotel sector. At the same time they are taking a slice of the cake and commissions are growing rather than sinking.
The “hotel vs OTA” battle that arises from that is being approached differently by the DACH countries. In Germany the cartel office is acting for rate parity, Switzerland is set on national booking and Austria is choosing the “wait and see”.
Prof. Schegg has a clear opinion on this battle. Hotels have an opportunity, they have to work hard on their fitness though and add real value for their guests. As an example he named the e-fitness Zermatt project. With this Zermatt Tourism wants to scale the peaks of digital communication in the coming years at the foot of the Matterhorn.
The e-fitness programme in Zermatt consists of the following four areas which interact dynamically with each other but which can also be used individually:
Finally several speakers gave insights into the “hotels vs OTAs” battle with examples from practice. The speakers were unanimous in one point: To be successful, the hoteliers must regain control of the Customer Journey!
At Tourism Fast Forward there was much talk about the Customer Journey, and soon you will find more information about that right here.
- OTA: 21.2%
- GDS: 0.8%
Amongst National Tourism Organisations and Destination Marketing Organisations in the DACH region, the Austrian organisations bring in the most bookings. The figure here though is still relatively low, at 2.2%.
Classical sales partners are significantly more important for bookings in Austria than those in Germany and about as significant as those in Switzerland. Travel agencies, conference organisers und hotel chains generate 10.2% of bookings. The remaining 1.6% comes through other channels.
The OTA Landscape in the DACH region
The current figures from Prof. Schegg from 2015 show the dominance of three big players amongst OTAs: Priceline, Expedia and HRS. Booking.com and agoda amongst others belong to Priceline, while e.g., ebookers, venere.com and Hotels.com belong to Expedia. HRS is in the OTA market with HRS, tiscover and hotel.de.
In all three countries of the DACH region they achieve together between 89.5 – 94.2% of the OTA market. In all countries Priceline is the biggest player in the market by a distance:
- Austria 89.5%: Priceline 65.5% - HRS 12.8% - Expedia 11.2%
- Switzerland 94.1%: Priceline 71.3% - HRS 8.6% - Expedia 14.2%
- Germany 94.2%: Priceline 51.9% - HRS 36.4% - Expedia 5.9%
Conclusion: Direct bookings are falling; indirect sales and thus commissions are growing.
Hotel vs. OTA?
At the end of the presentation by Prof. Schegg, Markus Gratzer, the General Secretary of the Austrian Hoteliers Association joined him on stage. Gratzer stressed that the OTAs are important partners in the hotel sector. At the same time they are taking a slice of the cake and commissions are growing rather than sinking.
The “hotel vs OTA” battle that arises from that is being approached differently by the DACH countries. In Germany the cartel office is acting for rate parity, Switzerland is set on national booking and Austria is choosing the “wait and see”.
Prof. Schegg has a clear opinion on this battle. Hotels have an opportunity, they have to work hard on their fitness though and add real value for their guests. As an example he named the e-fitness Zermatt project. With this Zermatt Tourism wants to scale the peaks of digital communication in the coming years at the foot of the Matterhorn.
The e-fitness programme in Zermatt consists of the following four areas which interact dynamically with each other but which can also be used individually:
- Check: Analysis of the current situation
- Coach: independent and individual advice
- Training: Increasing digital know-how
- Challenge: Implementing what is known and recognised
Finally several speakers gave insights into the “hotels vs OTAs” battle with examples from practice. The speakers were unanimous in one point: To be successful, the hoteliers must regain control of the Customer Journey!
At Tourism Fast Forward there was much talk about the Customer Journey, and soon you will find more information about that right here.
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